ACWA Power reports consolidated net profit of SAR542m in H1 2022, reflecting a 21% YoY rise

Saudi Arabia’s ACWA Power Company (ACWA Power) has announced its quarterly and semi-annual financial results for the three- and six-months periods ending June 30 2022.

The company’s consolidated net profit attributable to equity holders of the parent reached SAR542m with a year-on-year (YoY) increase of 21 per cent, powered by a higher operating profit before impairment loss and other expenses and other income.

The company said the increase was achieved despite the additional deferred tax losses incurred by the company’s subsidiaries in Morocco due to the devaluation of the Moroccan dirham.

ACWA Power’s adjusted net profit for the first six months of 2022 was SAR516m and marginally lower than the adjusted net profit of SAR520m of the same period of the prior year.

The company’s new projects that achieved their initial or project commercial operation dates during or after Q2 2021 in addition to recovery of a performance liquidated damage claim contributed strongly to the growth in operating profit before impairment losses and other expenses.

However, this performance was partially offset by lower income from the projects that experienced forced plant outages in some of the plants.

ACWA Power’s parent operating cash flow (POCF) for the first six months of 2022 was SAR2.11bn, increasing from SAR216m compared to the first six months of 2021, a significant increase at SAR1.903bn.

This was mainly due to higher distribution from projects by SAR1.50bn, including from RAWEC following the refinancing of its then outstanding debt. The company’s parent net leverage stood at SAR7.97bn as of June 30, decreasing by 20.5 per cent as of  December 31 2021, mainly because of higher period end cash.

“Over the course of 2022, the strategic importance of the power generation, water desalination and green hydrogen sectors has resulted in ACWA Power achieving many milestones, including project awards, progress in commissioning existing world- class facilities and solid financial results,” said Mohammad Abunayyan, chairman, ACWA Power. “This is an indication that the utilities industry remains strong, despite global geopolitical and economic challenges. We continue to pursue active bids in Saudi Arabia and beyond. We are also expanding our focus to include green hydrogen projects which will add to our expanding portfolio of renewables and other low-carbon technologies in our efforts to accelerate the path toward slowing down the impact of climate change, in line with Saudi Vision 2030 and the Saudi Green Initiative.”

Highlights of H1 2022

During the course of the first six months, ACWA Power signed a limited notice to proceed agreement in relation to the engineering procurement and construction contract for the NEOM Green Hydrogen Project in Saudi Arabia with NEOM Green Hydrogen Company and Air Products. The contract value of this agreement is reported US$900m.

As of June 30, ACWA Power’s portfolio comprised 67 projects in operation, construction, or advanced development in 13 countries. These projects have a value of SAR249.3bn at total investment cost, with capacity to generate 42.7 GW of electricity and produce 6.2 million m3 per day of desalinated water.

“ACWA Power’s financial performance in the first six months demonstrates that our develop-invest-operate-optimise model is continuing to deliver robust results, even in unsettled times. We have grown in line with expectations, working diligently to mitigate geopolitical and global financial and supply chain disruptions,” said Paddy Padmanathan, vice chairman and CEO, ACWA Power. “With new project wins, an active new business pipeline within the utilities space that is expanding in existing and new markets, and growing technological capabilities, our development pipeline remains strong.”

In June this year, ACWA Power’s ordinary general assembly approved distribution of dividends for the year 2021, amounting to SAR562m in total, which is SAR0.77 per share, or 7.7 per cent of nominal value per share, which was fully paid subsequently in July.

In recent news, ACWA Power has signed a memorandum of understanding with POSCO Holdings, the holding company of South Korea’s POSCO Group. The agreement will involve the joint development of green hydrogen and its derivatives such as green ammonia, to decarbonise POSCO Group’s power generation, and its steel manufacturing processes, along serving other Korean clients of POSCO Group.

Read: ACWA Power, POSCO Holdings to jointly explore the production of green hydrogen and green ammonia